STATE OF CONNECTICUT

DEPARTMENT OF ENVIRONMENTAL PROTECTION

In the matter of

The State ofConnecticut

and

Pfizer, Inc.

TRADING AGREEMENT AND ORDER

NO.8093A

WHEREAS, the Commissioner of Environmental Protection ("Commissioner") and Pfizer, Inc.

("Pfizer"), having agreed to the tenns and conditions set forth in Trading Agreement and Order

No. 8093 issued on July 19, 1995, do now, by mutual agreement, supersede said Trading

Agreement and Order as follows:

A. At the request and with the agreement of Pfizer, the Commissioner finds the following:

(Printed on Recycled P.per)

79 Elm Street • Htrlrord, CT 06106·5127

bttp:lldep.lllle.cl.UI

All Eql4lll Opportl4lllry Employer

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Pfizer is a corporation which owns and operates a pharmaceutical p,roduction

and research facility at Eastern Point Road, Groton, Connecticut (' facility").

At the facility, Pfizer operates six (6) dual-fuel fired steam hoilers ("hoilers''),

numbered 1, 2, 3, 4, 5, and 8. The Department of Envirorunental Protection

("Department") and Pfizer are currently workin~ on a Trading Agreement and

Order to address excess nitrogen oxides ("NUx' ) emissions from boilers I, 2

and 3. Boilers 4, 5 and 8 were projected to emit 925 tons per year of NOx

between June I, 1995 and May 31, 1996. Pursuant to Section 22a-174-22,

Resulations of Connecticut State Agencies ("Regulations"), the projected NOx

emissions for boilers 4, 5, and 8 for that same time period was 632 tons

(equivalent to 0.25 pounds per million British thermal units ("lbslMMBtu") of

heat input ).

In 1996, 10w-NOx burners. flue gas recirculation and natural gas burning

capability were installed on/added to boilers 4, 5 and 8, thereby reducing said

boilers' NOx emission rates below their 1995 emission rates. Emission

reductions achieved through the installation of 10w-NOx burners. flue gas

recirculation and the burning of natural gas are eligible. pursuant to Section 22a174-220)(3) ofthe Regulations. to be considered surplus emissions reductions

for purposes of generating emission reduction credits ("ERCs"). Separate

continuous emissions monitors ("CEMs") measure NOx emissions from each

boiler. The CEM operational trial period for boilers 4 and 5 was completed on

July 6, 1996 and on October 15, 1996 for hoiler 8.

By monitoring and controlling the combustion process of boilers 4, 5 and 8, and

by burning natural gas. Pfizer has represented that it can minimize NOx

emissions so that emissions frequently can be kept below the NOx emission

limitations estahlished by Sections 22a-174-22(e) ofthe Regulations. In

accordance with the tenns and conditions ofthis Trading Agreement and Order,

Pfizer may obtain approval of actual reductions in NOx emissions generated

through combustion control and burning natural gas for use as ERCs.

Pursuant to Section 22a-174-22(j) ofthe Regulations, Pfizer intends hoth to

Date: 1/4J:J
Pfizer. Inc.

2 TRADING AGREEMENT

AND ORDER NO. 8093A

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acquire and generate approved ERCs until May I, 2003, at the facility.

Approved ERCs are defined for purposes ofthis Trading Agreement and Order

as those for which the CommissIOner has provided written authorization for use

in compliance with Section 22a-174-22 ofthe Regulations.

Prior to receipt of approval for ERCs generated at the facility, Pfizer has

acquired 270 tons of approved ERCs for use at the facility's boilers 4, 5 and 8.

Pfizer will continue to acquire ERCs on an as-needed basis. Pfizer will provide

an accounting of actual NOx emissions to the Department of Environmental

Protection, based on data recorded by the CEMs pursuant to paragraph D.6. of

this Trading Agreement and Order.

Ten (10) percent ofthe ERCs generated at the facility shall be retired and

permanently removed from all calculations to assure a benefit to the

environment.

When properly documented by Pfizer, and approved by the Commissioner, the

emission reductions identified above, and as computed in accordance with the

terms ofthis Trading Agreement and Order, will conform to the requirements of

Section 22a-174-220) (3) ofthe Regulations. Specifically, the reductions will

be:

.B&al because they will result in a reduction of actual emissions released into

the air, net of any consequential increase in actual emissions resulting from

shifting demand. The emission reductions will be properly measured, recorded

and reported.

Quantifiable because they are based on CEM data as applied in an appropriate

reliable and replicable protocol. providing the rate and total mass amount of

reduction.

Surplus because they are not required by any Connecticut statute or regulation

mandated by a current State Implementation Plan (SIP), and are not currently

relied upon in any applicable attainment plan, any reasonable further progress

plan or milestone demonstration.

Pennanent because the 10w-NOx burners, flue gas recirculation and natural gas

burning capability will be in place and operating. and an appropriate tracking

system is in place to monitor all data required to verify and quantify the creation

ofERCs.

Enforceable because the ERCs are approved by the Commissioner

retrospectively after the submission by Pfizer of a report that documents their

creation.

9. The emissions trading baseline ("'baseline emission rate") for boilers 4. 5 and 8

is 0.25 IbsIMMBtu ofheat input when operating on No.6 fuel oil, and 0.20

IbslMMBtu of heat input when operating on natural gas. Said baseline emission

Initials:CJf..fi- Date: MeJ1
Pfizer, Inc.

3 TRADING AGREEMENT

AND ORDER NO. 8093A

rates are based on the following approved stack tests completed 6/26/96 for

boiler 4, 6/27/96 for boiler 5 and 9/19/96 for boiler 8.

Boiler No. Emission Rate (IbslMMBtu)

4 Natural Gas 0.14

No.6 Fuel Oil 0.26

5 Natural Gas 0.20

No.6 Fuel Oil 0.25

8 Natural Gas 0.13

No.6 Fuel Oil 0.31

10. As documented in Attaclunent 1, attached to and incorporated by reference into

this Trading Agreement and Order, 137.7 ERCs were created at boilers 4. 5 and

8 between May 31,1996 and September 24,1998 (97.7 during the ozone season

and 40.0 during the non-orone season). Ofthe 97.7 ozone season ERCs, 44 early

emission reduction credits were created below the standards prescribed in

Section 22a-174-22a ofthe Regulations (the NOx Budget Program) during 1997

and 1998 by boilers 5 and 8, and shall be converted into allowances.

II. Ten (10) percent ofthese ERCs (13.7) are retired and pennanently removed

from all calculations to assure a benefit to the envirorunent, leaving 80 ERCs

available for use (44 ozone season and 36 non-ozone season).

B. The Commissioner, in accordance with the provisions ofthis Trading Agreement and

Order, pursuant to Sections 22a-174-22(d)(4) and 22a-174-22G) ofthe Regulations, will

allow approved sources within Connecticut to use 80 tons ofNOx ERCs described in

paragraph A.II. ofthis Trading Agreement and Order (44 during the orone season and

36 during the non-ozone season) for purposes of compliance under Section 22a-I74-

220) andlor 22a-174-3(1)(5) ofthe Regulations to achieve a portion ofthe nitrogen

oxide emission reductions required or as emissions offsets for new sources.

Upon sufficient documentation as prescribed below. the Commissioner may provide

written approval of additional creation of ERCs by Pfizer retrospectively. Approved

ERCs created by Pfizer may be held by Pfizer or transferred to other sources. Such

ERCs shall remain valid until they are used or until May 1,2003, whichever occurs

first.

C. The Commissioner. in accordance with theprovisions ofthis Trading Agreement and

Order. and pursuant to Section 22a-I74-22(J) ofthe Regulations. hereby allows Pfizer to

use approved ERCs. as necessary. to achieve the nitrogen oxide emission reduction

required by Section 22a-174-22(d)(2) ofthe Regulations.

Initials: c;i"a Date:#
Pfizer, Inc.

4 TRADING AGREEMENT

AND ORDER NO. 8093A

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required by Section 22a-174-22(d)(2) ofthe Regulations.

D. With the agreement of Pfizer, the Commissioner, acting under Sections 22a-6, 22a-171,

22a-174, 22a-176, and 22a-l77 ofthe Connecticut General Statutes, orders Pfizer as

follows:

ERe generation. For purposes of generating ERCs from boilers 4, 5, and 8 at

tbe facility, Pfizer shall use 0.25 Ibs/MMBtu of heat input when operating on

No.6 fuel oil and 0.20 IbslMMBtu of heat input when operating on natural gas

as the baseline emission rates for boilers 4, 5 and 8, or the proportioned baseline

emission rate set forth in footnote 1 of paragraph D.2. ofthis Trading Agreement

and Order, when simultaneously operating on more than one fuel. Pfizer shall

use the above referenced baseline emission rate(s) when calculating the

proportioned baseline emission rate. When calculating ERCs, Pfizer shall use

CEM-recorded NOx emission rates* for each boiler and actual fuel use for each

boiler in MMBtu/day, when determining heat input. Ten (10) percent of all

ERC, (tons) created by the boilers shall be retired by the facility and

pennanently removed from all calculations to assure a benefit to the

environment. However, this ten (10) percent environmental discount shall not

apply to ozone season ERCs generated below 0.20 IbsIMMBtu of heat input

during the years of 1997 and 1998 for boilers 5 and 8, should Pfizer decide to

convert said ERCs into allowances under proposed Section 22a-174-22a ofthe

Regulations (the NOx Budget Program), provided such Regulation has been

adopted and becomes effective.

*These rates shall be calculated pursuant to the methodology described in 40 Code of

Federal Regulations Part 60.

2. When the boilers have daily NOx emissions below the applicable baseline

emission rate(s), or the proportioned baseline emission rate, Pfizer shall

calculate the amount ofERCs generated, as follows:

ERCs generated (tons) [Total heat input of all fuels in MMBtu x (proportioned

baseline emission ratel - the CEM-recorded NOx emission ratel) -i- 2000

pounds/ton] x (0.90).'

!This rate shall be calculated by I) multiplying the heat input of each fuel combusted by

the baseline emission rate(s) for such fuel; 2) summing those products; and 3) dividing

the sum by the total heat input. Ifthe boilers are operating exclusively on one fuel,

Pfizer may replace the proportioned baseline emission rate with the applicable baseline

emission rate for that fuel.

1This rate shall be calculated pursuant to the methodology described in 40 Code of

Federal Regulations Part 60.

J.Ten (10) percent of all ERCs (tons) created by the boilers shall be retired by the

facility and pennanently removed from all calculations on a daily basis to assure a

benefit to the environment. However, this ten (10) percent environmental discount

shall not apply to ozone season ERCs generated below 0.20 IbsIMMBtu of heat input

Initials: Date: 1/JJ/JJ.
Pfizer, Inc.

5 TRADING AGREEMENT

AND ORDER NO. 8093A

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during the rears of 1997 and 1998 for boilers 5 and 8, should Pfizer decide to convert

said ERCs IOto allowances under proposed Section 22a-174-22a ofthe Regulations (the

NOx Budget Program), provided such Regulation has been adopted and becomes

effective.

In order to consider a Daily NOx Averaging Period valid for ERC approval, it

must contain valid data hours for seventy-five percent (75%) ofthe operating

hours in that daily period (example: minimum 18 valid hours for a full 24·hour

operating day; mlOlmum 12 hours for 16 operating hours, etc.). A DailyNOx

Averaging Period is defined as the total of all operating hours in a day during

which fuel is being fed to each boiler.

Additionally, for a data hour to be considered a valid hour, seventy-five percent

(75%) minimum data capture requirements must be met for each one-hour block

period. All NOx and CO/O, CEMs must comply with the 40 CFR Part 60

Appendix F drift criteria.

Pfizer shall maintain records for each boiler showing daily NOx mass emissions,

and actual NOx emission rates (24-hour average). Pfizer shall also maintain

records showing a monthly total of all ERCs generated net ofthe ten (10)

percent environmental discowlt.

In requesting ERC approval, Pfizer shall provide documentation containing

monthly operating reports of actual fuel use in MMBtu, daily actual NOx mass

emissions and NOx emission rates (24-hour average), number of invalid data

hours in each 24·hour period, number of operating hours per day, and ERCs

generated, using the baseline emission rate(s), or the proportioned baseline

emission rate, net ofthe ten (10) percent environmental discount.

No later than March 1 of every year after issuance ofthis Trading Agreement

and Order, Pfizer shall include with the Annual Emission Statement provided to

the Commissioner, a record of each sale or other transfer, and use of any and all

of the ERCs approved within and subsequent to issuance ofthis Trading

Agreement and Order until all such ERCs have been used. Pfizer shall also

include actual NOx emissions from the boilers and the amount of all ERCs used

(including approved ERCs generated at and/or purchased from other facilities),

generated and/or approved for the previous calendar year. These reports shall be

on a form prescribed by the Commissioner and shall be in montWy increments.

This reporting may cease if a central registry is approved by the Commissioner.

Should Pfizer choose to discontinue the generation of ERCs, Pfizer will notify

the Commissioner upon discontinuance.

Upon sufficient documentation that Pfizer has met the requirements of

paragraphs D.l., D.2., D.3., D.4., and D.5. ofthis Trading Agreement and Order,

the Commissioner may provide written approval ofERCs created by Pfizer

retrospectively, in addiuon to those approved in paragraph B. ofthis Trading

Agreement and Order. Requests for approval of all subsequent ERCs created

shall be submitted in writing to the Commissioner. Approved ERCs created by

Date: q-/'d-f(ff
Pfizer, Inc.

6 TRADING AGREEMENT

AND ORDER NO. 8093A

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Pfizer may be held or transferred to other persons. Such ERCs shall remain

valid until they are used or until May I, 2003, whichever occurs first.

Should Pfizer choose to generate additional ERCs, reports documenting these

ERCs may be submitted on a quarterly or semi-annual basis. Such reports shall

be compiled on a monthly basts

ERe use. Approved ERCs shall be acquired for the period beginning June I,

1995 until Pfizer achieves permanent compliance for boilers 4, 5 and 8 with the

emission standards in SectIon 22a-174-22(e) ofthe Regulations or until May I,

2003, whichever occurs first. Pfizer shall acquire approved ERCs, and

document, summarize and record the daily amounts ofNOx emissions and

ERCs used by each boiler each month, and shall maintain and provide such

records in accordance with the following and Section 22a-174-4 ofthe

Regulations, until May 1,2003:

a. Before the first day of each month after May 31, 1996, calculate

projected worst case ERCs required for the same month as follows:

ERCs (tons) = {(Full load emission rate ("FLER") IbsIMMBtu - [(0.95)

x (allowable emission limit in Section 22a-174-22 ofthe Regulations or

prop:>rtioned emission rate calculated pursuant to Section 22a-174-22

(f)(Z)(A) ofthe Regulations in IbsIMMBtu)]) x (Estimated fuel use in

MMBtu)} .;. 2000 pounds.

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Acquire sufficient approved ERCs no later than the first of each month to

assure compliance for, at a minimum, that month. Excess ERCs from

previous months can be applied to subsequent months. ERCs required

shall be adjusted upwards by 100% ifERCs are not in Pfizer's

possession prior to use.

No later than the twentieth day of each month, calculate ERCs used in

the preceding month, as follows:

For each boiler on each day, determine whether the 24-hour

average NOx emission rate· exceeds the allowable emission limit

in Section 22a-174-22 ofthe Regulations.

For each boiler with daily NOx emissions exceeding the

allowable emission limit in Section 22a-174-22 ofthe

Regulations, calculate the amount ofERCs required, as follows:

ERCs required (tons) {«CEM-recorded NOx daily average emission

rate in IbsIMMBtu*) - [(0.95) x (allowable emission limit in Section

22a-174-22 ofthe Regulations or pro~ioned emission rate calculated

pursuant to Section 22a-174-22(f)(2) A ofthe Regulations in

IbslMMBtu)]) x (actual fuel use in M tu)} .;. 2000 pounds.

Date:~
Pfizer, Inc.

7 TRADING AGREEMENT

AND ORDER NO. 8093A

d.

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*This rate shall be calculated pursuant to the methodology described in 40

Code of Federal Regulations Part 60.

Document and record daily and monthly NOx emissions and ERCs used.

Maintain documentation to attest to the fact that ERCs used during the

ozone season were generated during the ozone season. The ozone season

is from May 1 through September 30 in any calendar year. Generator

certification oftbis fact shall be sufficient.

After full program review, and ifthe Commissioner deems it appropriate,

the Commissioner may allow the survival and use of these ERCs beyond

April 30, 2003.

10. Pfizer shall retain records and supporting documentation as described in this

Trading Agreement and Order for a minimum aCtive years, commencing on the

date such records were created. Pfizer shall provide the records specified above

to the Commissioner within thirty (30) days of receipt of a written request from

the Commissioner.

11. Provided that all conditions of this Trading Agreement and Order are met, and

prior to May 1.2003, Pfizer shall comply during operation of each boiler with a

full load emission rate limitation of 0.366 IbsIMMBtu heat input, averaged on a

24-hour basis.

12. No later than May I, 2003, Pfizer shall comply with the requirements ofSection

22a-174-22(d)(2) of the Regulations unless this Trading Agreement and Order is

otherwise extended by the Commissioner.

13. As used in this Trading Agreement and Order, "Commissioner" means the

Commissioner of Environmental Protection or an agent of the Commissioner.

14. Notjfication ofnoncompljance, In the event that Pfizer becomes aware that it

did not or may not comply, or did not or may not comply on time, with any

requirement ofthis Trading A~reement and Order or of any document required

hereunder, Pfizer shall immediately notify the Commissioner and shall take all

reasonable steps to ensure that any noncompliance or delay is avoided or, if

unavoidable, is minimized to the greatest extent possible. In so notifyin~ the

Commissioner, Pfizer shall state in writing the reasons for the noncomphance or

delay and propose, for the review and written approval ofthe Commissioner,

dates by which compliance will be achieved, and Pfizer shall comply with any

dates which may be approved in writing by the Commissioner. Notification by

Pfizer shall not excuse noncompliance or delay, and the Commissioner's

approval of any compliance dates proposed shall not excuse noncompliance or

delay unless specifically so stated by the Commissioner in writing,

IS. Certjfication of documents. Any document, including hut not limited to any

notice, which is required to he submitted to the Commissioner under this

Initials: d.il..-- Date:~
Pfizer, Inc.

8 TRADING AGREEMENT

AND ORDER NO. 8093A

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Initials:

Trading Agreement and Order shall be signed by the chief executive officer of

Pfizer or a duly authorized representative ofsuch officer, as those terms are

defined in Section 22a-430-3(b)(2) ofthe Regulations, and hy the individual or

individuals responsible for actually preparing such document, each ofwhom

shall examine and be familiar with the mformation submitted in the document

and all attachments thereto and shall make inquiry ofthose individuals

responsible for obtaining the information to determine that the information is

true, accurate, and complete, and each ofwhom shall certify in writing as

follows:

"I have personally examined and am familiar with the information submitted in

this document and all attachments thereto, and I certify that based on reasonable

investigation, includina my inquiry of those individuals responsible for

obtaining the informatIon, the submitted information is true, accurate and

complete to the best ofmy knowledge and belief. I understand that any false

statement made in the submitted information may be punishable as a criminal

offense under Section 22a-175 ofthe Connecticut General Statutes or, in

accordance with Section 22a·6 ofthe Connecticut General Statutes, under

Section 53a-157b ofthe Connecticut General Statutes, and in accordance with

any other applicable statute."

Final Agreement and Order. This Trading Agreement and Order is the final

agreement and order by and between the Commissioner and Pfizer with respect

to the matters addressed herein, and shaH not be modified without the written

agreement of both parties.

False statements. Any false statement in any information submitted pursuant to

this Trading Agreement and Order may be punishable as a criminal offense

under Section 22a-175 ofthe ConnectIcut General Statutes or, in accordance

with Section 22a-6, under Section 53a-157b of the Connecticut General Statutes.

Notice of transfer: liability of Pfizer and others. Until Pfizer has fully complied

with this Trading Agreement and Order, Pfizer shall notify the Commissioner in

writinl; no later than fifteen (15) days after transferring aU or any portion ofthe

operations, the facility, the site or the business which are the subject of this

Trading Agreement and Order, or obtaining a new mailing or location address.

Any license transfer shall be conducted in accordance with Section 22a-60 of the

Connecticut General Statutes. Pfizerts obligations under this Trading Agreement

and Order shall not be affected by the passage oftitle to any property to any

other person or municipality. Any future owner ofthe facility may be subject to

the issuance of a Trading Agreement and Order from the Commissioner.

Commissioner's powers. Nothinl; in this Trading Agreement and Order shall

affect the Commissioner's authonty to institute any proceeding or take any other

action to prevent or abate violations of law, prevent or abate pollution, recover

costs and natural resource damages, and to impose penalties for violations of law

which are willful or criminally negligent or for which penalties have not been

specifically provided in this Trading Agreement and Order, including but not

Date:~
Pfizer, Inc.

9 TRADING AGREEMENT

AND ORDER NO. 8093A

limited to violations of any permit issued by the Commissioner. If at any time the

Commissioner determines that the actions taken by Pfizer pursuant to this Trading Agreement

and Order have not fully achieved compliance with Section 22a-174-22 ofthe Regulations, the

Commissioner may institute any proceeding against Pfizer to undertake further investigation or

further action.

20. Pfizer's obligations under law. Nothing in this Trading Agreement and Order

shall relieve Pfizer of other obligations under applicable federal, state and local

law.

21. Access to records and facility. Any representative of the Department of

Environmental Protection may enter and inspect the facility and inspect and

copy records within normal business hours without prior notice for the purposes

of monitoring and enforcing the actions required or allowed by this Trading

Agreement and Order.

22. No effect on rights of other persons. This Trading Agreement and Order shall

neither create nor affect any rights of persons who or municipalities which are

not parties to this Trading Agreement and Order.

23. No Creatjon of Property Rights. This Trading Agreement and Order does not

create any property rights with respect to these ERCs.

24. Notice to Commissioner ofchanges. Within fifteen (15) days ofthe date Pfizer

becomes aware of a change in any information submitted to the Commissioner

under this Trading Agreement and Order, or that any such information was

inaccurate or misleading or that any relevant infonnation was omitted, Pfizer

shall submit the correct or omitted information to the Commissioner.

25. Submission of documents, Any document required to be submitted to the

Commissioner under this Trading A!P'eement and Order shall, unless otherwise

specified in writing by the CommiSSIOner, be directed to:

Ms. Wendy Jacobs

Department ofEnvirorunental Protection

Bureau of Air Management

Compliance and Fiefd Operations Division

Emissions Trading Unit

79 Elm Street

Hartford, Connecticut 06106

Initials: Date: 'f./1:1PJ
Pfizer, Inc.

10 TRADING AGREEMENT

AND ORDER NO. 8093A

Pfizer consents to the issuance oftms Trading Agreement and Order without further notice.

The undersigned certifies that he/she is fully authorized to enter into this Trading Agreement

and Order and to legally bind Pfizer to the terms and conditions ofthe Trading Agreement and

Order.

Pfizer. Inc., ?-/;

Signature: aJ~ Type Name: Edward L. Brennan

Type Title: Manager, Env. I Health & Safety

Date: Apd 1 28, J999

Issu d as a final consent order ofthe Commissioner of Environmental Protection on

-L/jJ.:&::L-~L-_, 1999 .

CITY OF GROTON

LAND RECORDS

MAILED CERTIFIED MAIL,

RETURN RECEIPT REQUESTED

Certified Document No.